Can a plaintiffs' firm put a clause in its retainer agreement committing clients to oppose confidentiality provisions in any settlement?

Plain-English summary

A plaintiffs' personal injury firm asked whether it could place a clause in its retainer agreements stating that, to advance the law and deter negligent conduct, settlements should not be made confidential, and that the client agrees not to accept a defendant's confidentiality condition unless the client firmly believes it benefits the client, and that the attorneys may refuse to agree to any defendant's confidentiality proposal. The committee said the inquiry raises issues under RPC 1.2(a) (abide by the client's decisions, including whether to accept a settlement offer), RPC 1.2(c) (limiting the objectives of representation with the client's consent after consultation), RPC 1.7(b) (material-limitation conflicts, requiring the client's written consent after consultation and full disclosure), and RPC 1.15(b) (withdrawal without material adverse effect on the client).

The committee concluded that the retainer provision violates RPC 1.2(c) and RPC 1.7(b) because of inadequate disclosure: it contains no discussion of the potential adverse consequences to the client of the proposed limitation, or of the nature of the conflict between the client's interests and the firm's interests. Although the firm contemplated some oral discussion with clients, it did not indicate the disclosures would go beyond the face of the retainer provision. The committee limited its analysis to the adequacy of disclosure at the outset of the representation.

The committee further concluded that even if RPC 1.2(c) and RPC 1.7(b) were satisfied, RPC 1.2(a) still requires the lawyer to abide by the client's decision on settlement. If the lawyer disagreed, RPC 1.15(b) would allow withdrawal only if it could be accomplished without material adverse effect on the client and, in the litigation setting involved, with the court's approval. The obligations under RPC 1.2(a) and RPC 1.15(b) are not subject to waiver under the circumstances presented.

Currency note

This opinion was issued in 2002, before the Washington State Bar Association's adoption of the 2006 revisions to the Rules of Professional Conduct. The opinion uses Washington's pre-2006 numbering: the withdrawal provision it cites as RPC 1.15(b) corresponds to current RPC 1.16 (declining or terminating representation), and Washington later moved client-property safekeeping to RPC 1.15A. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

In practice

Under the Washington rules as they stood at the time of the opinion, the committee treated a retainer-stage clause that commits clients to oppose confidential settlements as a limitation on the objectives of representation and a material-limitation conflict that must be disclosed: the clause failed RPC 1.2(c) and RPC 1.7(b) because it explained neither the potential adverse consequences nor the client-versus-firm conflict. The committee also treated the client's settlement-decision authority under RPC 1.2(a) and the withdrawal constraints under RPC 1.15(b) as not waivable by such a clause, so a lawyer who disagreed with the client's settlement decision could only withdraw without material adverse effect and, in litigation, with court approval.

Common questions

Q: Can a firm's retainer agreement commit the client to oppose confidential settlements?

A: The committee concluded the proposed clause violates RPC 1.2(c) and RPC 1.7(b) as drafted, because it discloses neither the potential adverse consequences to the client nor the nature of the conflict between the client's and the firm's interests.

Q: Could better disclosure fix the clause?

A: The committee said even if RPC 1.2(c) and RPC 1.7(b) were satisfied, RPC 1.2(a) still requires the lawyer to abide by the client's decision on settlement, and that obligation, along with RPC 1.15(b)'s limits on withdrawal, is not subject to waiver under the circumstances presented.

Q: What can a lawyer do if the client wants to accept a confidential settlement the lawyer opposes?

A: The committee said RPC 1.2(a) requires the lawyer to abide by the client's settlement decision; if the lawyer disagrees, RPC 1.15(b) allows withdrawal only without material adverse effect on the client and, in the litigation setting, with the court's approval.

Q: What made the disclosure inadequate?

A: The committee said the provision contained no discussion of the potential adverse consequences of the limitation or the nature of the client-firm conflict, and the firm did not indicate its oral discussions would go beyond the face of the clause.

Background and rules framework

The opinion applies Washington RPC 1.2(a) and 1.2(c) (scope of representation and the client's settlement decision; corresponding to Model Rule 1.2), RPC 1.7(b) (material-limitation conflicts; corresponding to Model Rule 1.7), and the withdrawal provision the opinion cites as RPC 1.15(b), which corresponds to Model Rule 1.16 (declining or terminating representation). The committee read the consultation requirement against the RPC "Terminology" definition of "consultation" (communication of information reasonably sufficient to permit the client to appreciate the significance of the matter). The opinion reflects Washington's pre-2006 rule numbering.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.2 / Washington RPC 1.2(a), 1.2(c) (client's decisions, including settlement; limiting objectives with consent)
• Model Rule 1.7 / Washington RPC 1.7(b) (material-limitation conflicts; written consent after full disclosure)
• Model Rule 1.16 / Washington RPC 1.15(b) (pre-2006 numbering) (withdrawal without material adverse effect)

See also

• ABA Formal Op. 00-417: Settlement Terms Limiting Use of Information
• WSBA Ethics Op. 1069: Client Acting Against Interests and the Objectives of Representation
• WSBA Ethics Op. 1096: Client as Opposing Expert Witness, Conflict and Withdrawal

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1237

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Advisory Opinion: 1987
Year Issued: 2002
RPC(s): RPC 1.2(a), 1.2(c), 1.7(b), 1.15(b)
Subject: confidentiality provision in settlement agreement, retainer agreement

The inquiring lawyer writes that his firm has a plaintiffs’ personal injury practice. He states that his firm generally opposes the use of confidentiality provisions in settlement agreements and would like to limit their use when possible:

“[W]e are considering placing the following paragraph in our retainer agreements. This would be discussed with the clients at the beginning of our legal relationship. Our intent is not that there could never be a confidentiality clause in a settlement, but that we would go into the relationship with our client with an understanding that absent some compelling circumstances for the benefit of the client, we would not agree to a confidentiality provision. In other words, if it were in the interests of the plaintiffs, we would not oppose the concept, but if it is simply a condition of settlement by the tortfeasor, we would have an ongoing policy to oppose such a provision.

“The following is the language that we have drafted for potential insertion into our fee agreement:

“The law firm… supports the legal concept that in addition to assisting clients in this case, a goal of the case will be to advance the law and benefit society in general and other injured persons specifically by helping to deter negligent conduct by wrong-doers. In order to meet that goal, settlements that may be reached in this case should not be made secret or confidential. Client agrees that client will not agree to a confidentiality agreement proposed by any defendant as a condition of settlement of the client’s case unless client firmly believes that such confidentiality is for the benefit of client. Client agrees that attorneys may refuse to agree to any confidentiality agreement proposed by any defendant in this case.”

The Rules of Professional Conduct Committee believes that this inquiry raises issues under RPC 1.2(a), RPC 1.2(c), RPC 1.7(b) and RPC 1.15(b). These provisions, for reference, provide, in pertinent part:

RPC 1.2(a): A lawyer shall abide by a client’s decisions concerning the objectives of representation, subject to sections (c) [set out below], (d) [not relevant to this inquiry] and (e) [again, not relevant to this inquiry], and shall consult with the client as to the means by which they are to be pursued. A lawyer shall abide by a client’s decision whether to accept an offer of settlement of a matter. * * *

RPC 1.2(c): A lawyer may limit the objectives of the representation if the client consents after consultation.

RPC 1.7(b): A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibility to another client or to a third person, or by the lawyer’s own interests, unless:

(1) The lawyer reasonably believes the representation will not be adversely affected; and

(2) The client consents in writing after consultation and a full disclosure of the material facts (following authorization from the other client to make such a disclosure). * * *” (see footnote 1)

RPC 1.15(b): Except as stated in section (c) [which requires a lawyer to remain in a case if directed by a court], a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client * * *.

RPC 1.2(c) allows a lawyer to limit the scope of a representation provided that the client consents. Similarly, RPC 1.7(b) allows a lawyer to undertake a representation where the interests of the client and the lawyer may conflict as long as the lawyer reasonably believes that the representation will not be adversely affected and the client consents in writing “after consultation and a full disclosure of the material facts.”

At the same time, RPC 1.2(a) requires a lawyer to abide by a client’s decision on settlement. If the lawyer disagrees with that decision, RPC 1.15(b) would only allow the lawyer to withdraw “without material adverse effect on the interests of the client” and, in the litigation setting contemplated here, the court involved permitted the withdrawal.

Here, the retainer provision contains no discussion of the potential adverse consequences to the client of the proposed limitation on the representation and the nature of the conflict between the interests of the client and those of the law firm. Although the law firm apparently contemplates some oral discussions with the clients concerned, it does not indicate that those disclosures will go beyond the face of the retainer provision. As such, the retainer provision violates RPC 1.2(c) and RPC 1.7(b) due to the inadequacy of the disclosure. (see footnote 2)

Further, even if RPC 1.2(c) and RPC 1.7(b) were satisfied, RPC 1.2(a) still requires that a lawyer abide by a client’s decision regarding settlement. If a lawyer disagreed with that decision, RPC 1.15(b) would only allow the lawyer to withdraw if the withdrawal could be accomplished without material adverse impact on the client and, in the litigation setting involved here, with the approval of the court involved. The obligations under RPC 1.2(a) and RPC 1.15(b) are not subject to waiver under the circumstances presented here.

Footnote 1: The “Terminology” section of the RPCs defines “consultation” as follows: “‘Consult’ or ‘Consultation’ denotes communication of information reasonably sufficient to permit the client to appreciate the significance of the matter in question.” Footnote 2: As the inquiry notes, it would likely be necessary to revisit the issue of disclosure and consent later in any given case depending on the facts. Because we are not presented with those facts, our analysis is limited here to the adequacy of disclosure at the outset of the representation.